US stocks rose yesterday, lifting some market indices to new highs, as another report showed the economy's surprising strength still had not sparked inflation. The Dow Jones advanced 38.31 to 11,186.41.

Investors were cheered for the second day in a row by the encouraging report on inflation. The Labour Department said that consumer prices held steady in June for the second month in a row - the best showing since 1986, when prices fell for three consecutive months.

Broader stock indicators posted bigger gains than the Dow, with the Nasdaq composite index and the Standard and Poor's 500 index reaching new closing highs. Advancing issues outnumbered decliners by a five-tothree margin on the New York Stock Exchange (NYSE), with 1,831 up, 1,091 down and 625 unchanged. NYSE volume totalled 796.79 million shares, up from 745.53 million on Wednesday. American Express and Coca-Cola led the Dow's advance, offsetting a sharp decline by International Paper.